Therma Luzon assumed management of Pagbilao coal power plant
Posted on October 4th, 2009
The 700-megawatt Pagbilao coal-fired thermal power plant in Quezon has been officially turned-over to the Therma Luzon Inc., a wholly-owned subsidiary of Aboitiz Power Corp (APC).
APC assumed management of the independent power producer contract of the said facility, making Therma Luzon the first IPP administrator in country.
Therma Luzon, being the IPP administrator, will be responsible for procuring the fuel requirements of the Pagbilao plant and selling the electricity generated by the plant.
“The turnover followed the successful completion by Therma Luzon of the conditions precedent required in the IPP Administration Agreement with the Power Sector Assets and Liabilities Management Corp. [PSALM],†APC said.
At present, IPPs are contracted to supply electricity to National Power Corp. (Napocor). Once these are turned over to the private sector, the winning bidders will be managing the contracted capacities of the government in IPP plants.
This is all part of the implementation of the Electric Power Industry Reform Act of 2001 where the privatization of 70% of the government’s IPP contract is one of the requirements before the open access and retail competition schemes can be implemented.
Last August, Therma Luzon topped the auction for the IPPA bidding with its bid of $691 million, which met the reserve price set by the PSALM board. “This value represented the present value of a series of monthly payments of PSALM from October 2009 to August 2025 using PSALM discount rates,†APC said.
Team Energy is currently managing the operation of the Pagbilao Plan under a build-operate-transfer contract which will expire on 2025. Team Energy president Federico E. Puno said it is open to a possible joint venture project with Aboitiz for the expansion of the facility’s capacities.
“With the IPP administrator coming in, I guess any expansion will be their option. But we can also discuss it with them if they want. If not, we’ll have a problem because if we do [the expansion] ourselves, we have to enter into a contract with them for joint facility utilization. I think going into a joint venture with them is much better,†Puno explained.
